The theme of the recent Gambia Association Accountants (GAA) conference was ‘Development of Microfinance Capability in the Gambia’. Extracts of a discourse delivered at the conference discussed how the government of the Gambia has taken measures aimed at ‘further deepening and building more resilient and sustainable microfinance institutions (MFIs)’ in recent years. The government has drafted a bill to regulate and supervise microfinance activities, reviewed microfinance policy guidelines and the Financial Institutions Act, and approved various microfinance projects.
The Central Bank is the main regulatory authority for microfinance activities in the Gambia through its Micro Finance Department (MFD). The MFD is currently working towards producing a governance framework and a manual of guidelines aimed at improving the microfinance industry. Various types of MFIs operate mainly in rural areas and these include 50 Savings and Credit Associations (VISACAs) and five Credit or Finance Companies. As at the end of December 2006 the VISACAs serviced over 66,000 clients with GMD 93.3 million (USD 3.5 million) in loans and GMD 116.9 million (USD 4.4 million) in deposits. The five Credit or Finance companies are the Gambia Women Farmers Association (GAWFA), National Association of Co-operative Credit Union of the Gambia (NACCUG), Gambia Savings Society (GAMSAVINGS), BAYBA and Reliance Financial Services.
The MIX Market, the microfinance information clearinghouse, only receives financial information from two of the five Finance Company MFIs. The first is the Gambia Women Farmers Association (GAWFA), established in 1987, which targets women farmers in rural areas. As at the end of December 2007 GAWFA reported Total Assets of USD 1.7 million; a Gross Loan Portfolio of USD 961,000; a Return on Assets of -1.61 percent and a Return on Equity of -3.88 percent. For the same period there were 18,628 active borrowers and 47,076 savers. GAWFA was given a C- Rating and an ‘Uncertain’ outlook in an October 2007 Planet Rating report. The second MFI that reports to the MIX Market is Reliance Financial Services, founded in 2006. The Total Assets for Reliance as at 31 December 2008 was USD 5.3 million. The Gross Loan Portfolio was USD 2.3 million with a Return on Assets of -15.91 percent and a Return on Equity of -114.35 percent. Reliance had 2,595 active borrowers and 23,575 savers. No rating information was available.
The remaining three registered finance companies did not report to the MIX Market and information was found on their websites and government websites. The National Association of Co-operative Credit Union of the Gambia (NACCUG), an umbrella organization of credit unions, was established in 1991. It has registered 70 credit unions and as at December 2007, total membership of affiliated credit unions was 27,054. Savings for the same period was GMD 121 million (USD 4.6 million) and loans outstanding was GMD 111.05 million (USD 4.2 million). GAMSAVINGS had 2,681 savers; total savings of GMD 3.5 million (USD 133,000) and a total loan portfolio of GMD 754,564 (USD 28,600) at the end of December 2005. BAYBA Savings and Credit Company, at the end of December, 2006, had 264 customers, deposits of GMD 3.2 million (USD 121,000), and loans of GMD 426,735 (USD 16,100).
NGOs with a small microfinance component and donor funded programs also exist in the Gambia. Donor funded programs include the Social Development Fund (SDF) and International Fund for Agricultural Development (IFAD). The SFD is part of the United Nations Development Program (UNDP) and is implementing the African Development Fund’s (ADF) Entrepreneurship Promotion and Microfinance Development Project (EDMDP) worth USD 13.55 million over four years. The project aims to provide business training to 24,000 individuals living in rural Gambia and microfinance products to 116,000 new clients including at least 14,345 additional microfinance loans. The IFAD was established in 1977 and is a United Nations agency dedicated to eradicating rural poverty in developing countries. Since 1982 the IFAD has worked in the Gambia specifically supporting rural microfinance projects. Its Rural Finance Project assists existing MFIs in expanding to rural areas with the objective of reaching 180,000 clients with savings, loans and insurance over a period of six years with a total project cost of USD 7.9 million, including a loan of USD 6.1 million. For further information about this project refer to this MicroCapital story.
By Sally Levy, Research Assistant
Additional Resources:
All Africa: Gambia: Development of a Micro Finance Capability
International Fund for Agricultural Development (IFAD): IFAD in The Gambia
GAWFA: Home
Reliance Financial Services: Home
MicroCapital Story: African Development Bank (ADB), Government of Gambia, and Social Development Fund (SDF) Embark in Microfinance Project
MicroCapital Story: USD 6.12 Million Loan for International Fund for Agricultural Development’s Rural Finance Project up for Ratification by Government of Gambia
The MIX Market: Gambia Women Farmers Association (GAWFA); Reliance Financial Services
Innovations in addressing rural finance challenges the Gambia experience, S. Bai Senghor, Director, Microfinance Department, Central Bank of The Gambia
Statehouse Gambia Budget 2007: Budget speech 2007 – Programme based budgeting for efficient resource allocation and use with a poverty reduction dimension
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